by Steve Kikikis, OMNI Practice Group
In Washington State, Governor Jay Inslee has halted all non-emergency services and elective procedures for the next 8 weeks. This applies to all hospitals, surgery centers, and dental offices… forcing most medical offices to close during this time.
Rent is still due!
The obligation to make a rent payment is not automatically stopped because your business has been forced to close! Here are some ideas of what you can try:
Talk to your Landlord.
Engage with your landlord right away. It may be news to them that your office has been forced to close, leaving you with little to no ability to produce revenue. They might in a situation to help, though this is a negotiation not a guarantee. Ask your landlord if they would be willing to waive or reduce your rent, a 90 day deferral of rent could be an option, or just pay the CAM/NNN – anything can help. Offer to make it up over time once the doors are back open and you’re treating patients. Remember the landlord may be having their own financial hardships, but they do have an interest in you being able to pay the rent for years to come.
Check-in with your insurance agent.
Some insurance policies have coverage for unique circumstances in the case that you are not able to run your business. This may help with covering rents and loss of wages.
I am not an attorney, nor is this an attempt to provide legal advice. So, check-in and consult with your attorney, and make sure they specialize in Commercial Real Estate Law with a focus on Medical leases and contracts. On rare occasions, your lease may include Force Majeure, which could offer relief in unforeseeable circumstances that prevent someone from fulfilling a contract, but this is unlikely. After a quick review of a traditional WA State Commercial Brokers Association Lease, there was no Force Majeure clause within the document.
Ask your attorney about Common Law which is prevalent in many states. This may address the impossibility to perform and make an income. It doesn’t automatically relieve you from your rent obligation, but the fact that you are forced to perform only emergency procedures in WA State may allow for an avenue for relief.
Banks across the nation are offering short term Small Business Loans at low rates as a method for giving small businesses financial aid. First, check-in with specific banks that focus on loans for Medical providers. Small Business Loans are available now. Some larger national banks may offer other loan programs or allow for deferred payments for the time being. Now may also be a good time to refinance your practice loan into a lower rate loan and saving you money.
If you need help getting in touch with a qualified attorney, banker, want to talk about your specific circumstances and ideas, or just want to tell me I am wrong, please contact me at Steve@omni-pg.com.
Find me on LinkedIn: https://www.linkedin.com/in/steve-kikikis-378b8697Read More
There is a steady decline of practice ownership, especially amongst male dentists. Approximately 80% of dentists currently own practices. Rising student debt, the emergence of corporate dentistry, shifting work-life balance preferences were just a few examples of why there is a decline in ownership. One of the big questions brought up is whether the trend is a big deal. It was pointed out that practice ownership is highly coveted and one of the reasons that dentists got into dentistry in the first place. All else being equal, owner dentists earn more than non-owner dentists. The question is, is practice ownership no longer as coveted as it used to be by younger, early career doctors?
The decline in practice ownership will continue for years to come. A comparison to the decline in ownership by physicians, which is now below 50%, was used as a comparison. Hospitals and groups have taken over the ownership of physician practices. The study states that physicians’ net hourly income is significantly higher than for dentists; Although, I would say that the annual income is higher for dentists, all things being equal. The author also claims that physicians are happier as a result of not being an owner of a practice. With reimbursements continuing to decline, dentists will be asked to do more with less. An emerging emphasis on quality and value will spur changes in dentistry.
If you have not read the article, I recommend you take a look. Email me at email@example.com and I will send you a copy. You can also go to jada.ada.org and search for “Practice Ownership Is Declining.”